Tuesday, 3 March 2015

Coal mine auctions hit a block, four bids to be ‘re-examined’

Government has told the nominated authority in charge of e-auctioning coal blocks to re-examine the bid process for the blocks won by these companies recently, following certain “prima facie discrepancies” including questions over the bid prices.

Putting Balco, JSPL and BS Ispat in a spot, the government has told the nominated authority in charge of e-auctioning coal blocks to re-examine the bid process for the blocks won by these companies recently, following certain “prima facie discrepancies” including questions over the bid prices.

The coal blocks in question are Gare Palma IV/1, Gare Palma IV 2&3 and Marki Mangli III. Balco had bagged Gare Palma IV/1 block with a bid of R1,585 a tonne Jindal Power, a subsidiary of Jindal Steel and Power, had retained its previously held blocks Gare Palma IV 2 & 3 at R108 a tonne. Its winning bid was the lowest among blocks earmarked for the power sector, which ranged from R470 per tonne to R1,110 per tonne.

Similarly, the Marki Mangli III block won by BS Ispat had the lowest winning bid price of R918 per tonne among the blocks reserved for the unregulated sector, which ranged from R1,402 to R3,502 a tonne.“There are some prima facie issues (with four coal blocks). Nominated authority (for coal blocks e-auction) has been asked to re-examine them,” Anil Swarup, coal secretary, told FE. The government will issue the vesting order for auctioned mines on March 23.

Gare Palma IV/2&3 is the biggest block among those reserved for the power sector with an extractable reserves of 155.49 million tonnes (mt) while Gare Palma IV/1 and Marki Mangli III have extractable reserves of 49.57 mt and 3.58 mt, respectively. These four mines are among the 19 operational blocks the government auctioned off in the first phase of e-auction. The next phase of auction will see 20 near-operational mines being auctioned next week.

The government has estimated that coal-bearing states will receive a revenue of Rs 1.2 lakh crore over 30 years while the states consuming power generated through these blocks will benefit as the collective power tariff will go down to the tune of Rs 37,000 crore.

Stating that auction of coal mines is one of the top three achievements of the government in its nine-month rein, finance minister Arun Jaitley had said in his Budget speech that the process would bring several lakh crore rupees to the kitty of coal-bearing states.

Comment:

The main benefit that government stated that the coal-bearing state will receive a good amount of revenue over a period of time.The states like jharkhand has ample amount of coal reserves.Thus situation will improve and it will create more jobs.The e-auction in coal brings transparency in the system.As,recently Narendra Modi said in an event that the technology will bring transparency in the system.

The reason of re-examined the four coal block is not stated in news.Till now 19 coal blocks are auctioned.However I feel that increase in price of coal in e-auction will surely affect the tariff rate of electricity.